BP to cut jobs as part of restructuring plan

SarahTurner

LONDON (MarketWatch) -- LONDON (MarketWatch) -- BP, Europe's second-largest oil company, on Thursday said job cuts would be "inevitable" as the company's new chief executive unveiled a restructuring plan to improve performance.

BP's
BP, -1.54%
(BP) chief executive, Tony Hayward, said the revamp would see up to four layers of management shed in some parts of the company.

But he noted that while the reorganization would yield some medium-term cost improvements, the major benefit would be the revenue boost expected from "greatly improved" operational efficiency.

Hayward said BP will comprise of only two segments in the future, Exploration & Production and Refining & Marketing. The current third division, Gas, Power & Renewables will be incorporated into the other two.

Hayward also said the company is making good progress on safety. BP's reputation suffered following an explosion and a fire in a U.S. refinery in 2005 that killed 15 people and an oil spill in Alaska the same year.

Hayward took on the role of chief executive five months ago, replacing John Brown.

"Our problem is not about the strategy itself but about our execution of it," said Hayward on Thursday.

"BP's performance has materially lagged our peer group in the last three years. It has been poor because we are not consistent and our organization has grown too complex. At the root of all this is a need to change our behaviors," said Hayward said in a statement issued by the company.

Redundancies would be "inevitable" in some parts of the company, he added, although front line operations will be strengthened.

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